The Forrester Wave : Private Cloud Solutions In China, Q1 2015

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1 For: Infrastructure & Operations Professionals The Forrester Wave : Private Cloud Solutions In China, Q by Charlie Dai and Frank Liu, January 23, 2015 Key Takeaways HP And VMware Lead Among Multinationals; Huawei Leads Among Local Vendors Forrester s research uncovered a market in which HP and VMware lead the pack. Citrix, Huawei Technologies, IBM, and Microsoft offer competitive options. 99Cloud, Bingosoft, and Yonyou are making progress in the market. The Private Cloud Market In China Is Growing As I&O Professionals Seek Agility The private cloud market in China is growing because more infrastructure and operations (I&O) professionals see private cloud solutions as a way to address their top challenges. I&O pros increasingly trust private cloud solution providers to act as strategic partners, advising them on difficult decisions regarding efficiency and agility. The User Experience Is The Key Differentiator In The Private Cloud Market As legacy technology becomes outdated and loses its effectiveness, the user experience will dictate which providers lead the pack. Vendors that can provide an outstanding experience across cloud management, service management, and automation capabilities will position themselves to successfully deliver agility and effectiveness to their customers. Access The Wave Model For Deeper Insight Use the detailed Forrester Wave model to view every piece of data used to score participating vendors and create a custom vendor shortlist. Access the report online and download the Excel tool using the link in the right-hand column under Tools & Templates. Alter Forrester s weightings to tailor the Forrester Wave model to your specifications. Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA USA Tel: Fax:

2 January 23, 2015 The Forrester Wave : Private Cloud Solutions In China, Q The Nine Providers That Matter Most And How They Stack Up by Charlie Dai and Frank Liu with Alex Cullen, Michael Barnes, Lauren E. Nelson, Dave Bartoletti, and Di Jin Why Read This Report In Forrester s 24-criteria evaluation of emerging private cloud solution vendors in China, we identified the nine most significant software providers 99Cloud, Bingosoft, Citrix, HP, Huawei Technologies, IBM, Microsoft, VMware, and Yonyou in the category and researched, analyzed, and scored them. This report details our findings about how well each vendor fulfills our criteria and where they stand in relation to each other to help enterprise architecture and infrastructure and operations professionals select the right partner for their private cloud solutions. Table Of Contents Adoption Of Private Cloud Solutions Is Gaining Momentum In China Competition Is Increasing Among Global And Local Players Private Cloud Solutions In China: Evaluation Overview Private Cloud Solution Evaluation Criteria Breakdown Vendor Inclusion Criteria Global Vendors Lead In China, But Local Players Are Gaining Ground Vendor Profiles Leaders: HP Extends Its Global Leadership In China, Followed By VMware Notes & Resources Forrester conducted product evaluations in September 2014 and interviewed nine vendors of private cloud solutions: 99Cloud, Bingosoft, Citrix, HP, Huawei Technologies, IBM, Microsoft, VMware, and Yonyou. Related Research Documents Vendor Landscape: Private Cloud Software December 5, 2014 The Dynamics Of China s Private Cloud Market October 24, 2014 The Forrester Wave : Private Cloud Solutions, Q November 25, 2013 Strong Performers: Huawei Is The Only Local Vendor That Competes With MNCs Contenders: 99Cloud, Bingosoft, And Yonyou Are Making Substantial Progress 10 Supplemental Material 2015, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please clientsupport@forrester.com. For additional information, go to

3 The Forrester Wave : Private Cloud Solutions In China, Q Adoption Of Private Cloud Solutions Is Gaining Momentum In China China has entered the age of the customer, and Chinese firms require more efficient and agile IT services to improve customer engagement and time-to-value. As business growth slows and digital disrupters enter the market, I&O professionals at various organizations are looking to private clouds to transform existing data centers and enable digital transformation of the business. But private clouds are not simply virtualized data centers. In Forrester s view, private cloud must include advanced virtualization, standardization and automation, self-service access, and resource usage tracking and monitoring. 1 According to Forrester s Business Technographics Global Priorities And Journey Survey, 2014, 51% of business and technology decision-makers in China plan to adopt private cloud as part of their cloud computing strategy (see Figure 1). Chinese firms primarily use private cloud to support the digital transformation of traditional businesses, where the need to respond faster to customers and provide them with innovative new products and services has never been so critical. 2 As this market is gaining momentum, this report focuses on the current state of private cloud solutions in China market. Figure 1 Chinese Organizations Tend To Choose Private Cloud As Their Future Cloud Direction Which types of cloud computing do you plan to adopt or increase your adoption of in the next 12 months? 51% 47% 38% Private cloud Public cloud Hosted cloud Base: 1,057 Chinese business and technology decision-makers (multiple responses accepted) Note: Not all responses are shown. Source: Forrester s Business Technographics Global Priorities And Journey Survey, Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

4 The Forrester Wave : Private Cloud Solutions In China, Q Competition Is Increasing Among Global And Local Players Chinese organizations are adopting private cloud in three primary areas: to transform legacy business infrastructure to better support business agility; to enable new digital business; or to modernize technology management systems, improve operational efficiency, and shorten the time-to-market of products and services. In the age of the customer, companies in industries like telecommunications, banking and financial services, and traditional retail that are being affected or even disrupted by the shift in behavior of customers in China are proactively evaluating and adopting private cloud solutions. Global vendors continue to lead the Chinese market, but local players are making progress. But all vendors face challenges, including: Global vendors are taking the lead, but localization takes time. Major global vendors like HP, IBM, and Microsoft have been present in China for decades and have strong experience in serving Chinese organizations. But although they are taking the lead in the private cloud solution market, most of them still focus on traditional products such as hardware and foundational virtualization software. Most multinational companies (MNCs) simply apply their global strategy directly to the Chinese market and lack localization strategies from the product, solution, and pricing perspectives. For example, the websites of some foreign providers of private cloud solutions have no Chinese-language introductory text; others lack a dedicated management team to run their private cloud solution business in China. Local vendors of various sizes focus on delivering unique value. Forrester sees large and small companies alike even startups providing private cloud solutions to the Chinese market. Bingosoft and 99Cloud are relatively small companies that provide Chinese customers with flexible services such as long-term on-site consulting and maintenance services and functional optimization of its private cloud solutions based on customer requirements. Huawei s private cloud solutions have performed relatively well; this can be attributed to the ongoing substantial investments that the firm has been making in its enterprise business since March Private Cloud Solutions In China: Evaluation Overview To assess the state of the private cloud solution market in China and see how the vendors stack up against each other, Forrester evaluated the strengths and weaknesses of top private cloud vendors. Private Cloud Solution Evaluation Criteria Breakdown After examining past research, user need assessments, and vendor and expert interviews, we developed a comprehensive set of evaluation criteria. We evaluated vendors against 24 criteria, which we grouped into three high-level buckets:

5 The Forrester Wave : Private Cloud Solutions In China, Q Current offering. Each vendor s position on the vertical axis of the Forrester Wave graphic indicates the strength of its current product offering. The key current offering criteria are cloud management and self-service access, service management and creation, automation capabilities, heterogeneity, contract terms and support, and cost. Combined, these criteria provide a detailed look at the current usability, customization options, ability to handle complex configurations, speed, certifications, out-of-the box security features, and consumability. Forrester used a combination of vendor evaluation responses, documentation, demos, pricing scenarios, and customer references to complete this section. Strategy. A vendor s position on the horizontal axis indicates the strength of its go-to-market strategy. Forrester evaluates strategy with planned enhancements, strategic vision, third-party ecosystem, partnerships, and customer experience. Forrester used a combination of vendor evaluation responses, documentation, vendor strategy briefings and strategy survey responses, demos, and customer references to complete this section. Market presence. The size of the vendor s bubble on the chart indicates its market presence in China. Forrester evaluates market size via installed base and revenue. Forrester used vendor evaluation responses, publicly available financial statements and documentation, and vendor strategy responses to complete this section. Vendor Inclusion Criteria Forrester included nine vendors in the assessment: 99Cloud, Bingosoft, Citrix, HP, Huawei Technologies, IBM, Microsoft, VMware, and Yonyou. Each of these vendors sells a software-only solution that allows complete automation and management of the cloud infrastructure provisioning process. In addition, these vendors all offer the following capabilities in China: A self-service portal and role-based access. This software presents an interface for different authenticated end users via role-based access controls to select options for deployment. It must have unique policy controls per tenant and user role and the ability to present unique catalogs per user or group. In most cases, this portal uses a web interface, but it may also be accessible in other ways, such as through a mobile client or command-line interface (CLI). Infrastructure provisioning capabilities. All private cloud solutions must be able to automatically provision infrastructure resources by connecting to element orchestration and monitoring tools or supplying their own orchestration capabilities within the suite. Management capabilities. Private cloud software solutions must include resource, user, and service management capabilities such that administrators can dictate what services and resources are available for request by user/role and manage all deployed services/resources within the cloud environment.

6 The Forrester Wave : Private Cloud Solutions In China, Q Monitoring and tracking of resources. System usage reports must be available through the portal to show basic utilization and tracking of infrastructure resources. Private clouds must track the use of virtual resources so that central accounting can be used to either: 1) chargeback for their consumption, or (as we have found most enterprises prefer today) 2) showback, which is to report on this consumption, or 3) prices available at time of request/purchase. API-based. The software solutions for private cloud must provide a unified application programming interface (API) for third-party product integration and programmatic control. As the most common users of private clouds are developers, it s often their preference to request resources and subsequently control those resources via CLI. This also allows for greater end user customization and feature enhancement. Generally available by December 1, Most of the solutions and all the features described in this evaluation had to be available prior to December 1, Any features added after this date were not considered in this evaluation. Operational in China. All vendors, both local and global, needed to have business operations in China. Global Vendors Lead In China, But Local Players Are Gaining Ground The evaluation uncovered a market in which (see Figure 2): HP and VMware lead the pack. HP and VMware tied for the top current offering. HP also had the best strategy, followed by VMware. These two vendors stand out from the crowd by providing an easy-to-navigate interface for administrators and end users alike. Both have clean strategies for bringing their private cloud solutions from the global marketplace into China. For example, HP launched the Helion project to bundle its private cloud solutions and provide a clean road map to customers. VMware focuses on helping Chinese organizations create a private cloud road map, from basic virtualization to the top private cloud management platform. Citrix, Huawei, IBM, and Microsoft offer competitive options. These four vendors did well in many of the major criteria, but not as consistently as the Leaders. Citrix, IBM, and Microsoft lack a private cloud strategy, especially for the Chinese market. For example, Microsoft and IBM have invested significant resources into their public cloud (Azure) and hosted private cloud (Cloud Managed Services [CMS]) offerings, respectively, in China in order to build a partner ecosystem for business operations. Huawei leverages its existing product portfolios to tie together a wealth of capabilities, and customers that already use its products often benefit from discounts.

7 The Forrester Wave : Private Cloud Solutions In China, Q Cloud, Bingosoft, and Yonyou are still ramping up. These vendors are all local and have less experience in the Chinese private cloud market; for example, 99Cloud was established in But they do have a clear sales strategy, including meeting specific customer requirements and working with customers to integrate private cloud into their existing platform at a lower total cost. This evaluation of the private cloud market in China is intended to be a starting point only (see Figure 3). We encourage clients to view detailed product evaluations and adapt criteria weightings to fit their individual needs through the Forrester Wave Excel-based vendor comparison tool. Figure 2 Evaluated Vendors: Product Information And Selection Criteria Vendor 99Cloud Bingosoft Citrix Systems HP Huawei IBM Microsoft VMware Yonyou Product evaluated 99Cloud Animbus BingoCloud 5.5 Citrix CloudPlatform Citrix CloudPortal Business Manager 2.0 HP Helion CloudSystem Enterprise Suite Huawei FusionCloud 3.1 Huawei FusionManager 3.1 IBM Service Delivery Manager v7.2.4 Windows Server 2012 System Center 2012 SP1 vcloud Suite featuring VMware vrealize Operations VMware vrealize Automation Yonyou UAP v2.1 Vendor selection criteria Version release date December 2013 October 2014 March 2014 May 2014 May 2014 August 2014 December 2012 January 2013 October 2014 October 2014 May 2014 Selected private cloud solutions must be generally available on December 1, Selected vendors must have local business operations in China as well as global business operations. Selected global vendors should not have been screened out of the evaluation process for the November 25, 2013 The Forrester Wave: Private Cloud Solutions, Q Forrester report. Forrester clients must frequently ask about and mention selected vendors in inquires and projects. Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

8 The Forrester Wave : Private Cloud Solutions In China, Q Figure 3 Forrester Wave : Private Cloud Solutions In China, Q1 15 Strong Risky Strong Bets Contenders Performers Leaders Current offering 99Cloud IBM Citrix VMware Bingosoft Yonyou Microsoft Huawei Technologies HP Go to Forrester.com to download the Forrester Wave tool for more detailed product evaluations, feature comparisons, and customizable rankings. Market presence Weak Weak Strategy Strong Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.

9 The Forrester Wave : Private Cloud Solutions In China, Q Figure 3 Forrester Wave : Private Cloud Solutions In China, Q1 15 (Cont.) Forrester s weighting 99Cloud Bingosoft Citrix HP Huawei Technologies IBM Microsoft VMware Yonyou CURRENT OFFERING Cloud management and self-service access Service management and creation Automation capabilities Heterogeneity Contract terms and support Cost STRATEGY Planned enhancements Strategic vision Third-party ecosystem Partnerships Customer experience MARKET PRESENCE Installed base Revenue 50% 40% 20% 20% 10% 10% 0% 50% 20% 30% 15% 15% 20% 0% 80% 20% Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited. Vendor Profiles Leaders: HP Extends Its Global Leadership In China, Followed By VMware HP. HP leads for its high level of competence across all major criteria. HP is consolidating its cloud portfolio as part of its Helion strategy and also provides the HP Helion CloudSystem and HP Helion OpenStack private cloud infrastructure-as-a-service solutions. Helion OpenStack targets startups, while Helion CloudSystem targets enterprises. While these two solutions are based on different versions of OpenStack, HP plans to unify them in the first half of The acquisition of Eucalyptus System will help HP get the talent and tooling it needs to further improve its private cloud capabilities. 3 The vendor has established a clear product road map to leverage its global strategy in the Chinese market. It also has a strong executive team working with local partners to provide services to Chinese customers.

10 The Forrester Wave : Private Cloud Solutions In China, Q VMware. VMware s strength also lies in its solid current offerings, but it lags HP in terms of a China-specific strategy. After VMware s vrealize suite became generally available, the vendor combined multiple products into the Enterprise version of its vcloud Suite, including vcloud Director, vrealize Automation, vfabric Application Director, vrealize Operations, vcenter Site Recovery Manager, vcloud Networking and Security, vcloud Connector, and vsphere Enterprise Plus. The strengths of vcloud Suite include the user interface as well as service management and creation. VMware has a huge customer base for its virtualization software in China, but few of them use the entire vcloud suite. VMware hopes to provide Chinese firms with a blueprint for private cloud. It has divided Chinese organizations into three categories: those kicking off a private cloud project, those paying attention to private cloud, and those with no private cloud plans. VMware offers different products to each category. Strong Performers: Huawei Is The Only Local Vendor That Competes With MNCs Citrix. The strengths of Citrix s CloudPlatform and CloudPortal Business Manager include their developer and end user interfaces, role-based administration, and governance and usage incentives. However, they lack service management and creation functions. The solution is based on Apache CloudStack, which a large number of early adopters in China have evaluated and adopted. Citrix targets firms in the telecommunications, financial services, and public sector verticals; Citrix CloudPlatform and CloudPortal Business Manager support both new and traditional cloud-native applications good news for large Chinese organizations with legacy applications for different businesses. In fact, many of Citrix s Chinese customers that initially used the free CloudStack ended up purchasing Citrix CloudPlatform in order to gain scale-out capability and business continuity for their private cloud environments. Huawei. The only local vendor that rated as a Strong Performer area in our evaluation, Huawei has strong capabilities in role-based administration and governance, template building, and automation in addition to its price advantages. As a gold member of the OpenStack Foundation, Huawei also focuses on contributions to the OpenStack community. Huawei will launch a new version in 2015 to enhance functions such as hybrid cloud enablement. The vendor has a strong strategy around FusionCloud for a distributed cloud data center with its OpenStackbased private cloud solutions. In addition, Huawei is based in China and has very strong market presence there. IBM. With fine capabilities in administrator interface usability, resource monitoring, and performance monitoring and management, IBM also provides the best contract flexibility. Rather than introducing a private cloud software solution to the Chinese market, IBM will introduce a holistic cloud computing concept focusing on the public cloud market with its CMS offering and hosted private cloud with its SoftLayer solutions. All that IBM still lacks in China is market presence.

11 The Forrester Wave : Private Cloud Solutions In China, Q Microsoft. Microsoft stands out for the usability of its administrator interface, access and control options, and hybrid cloud enablement to leverage its Azure service. Microsoft Azure is the only global public cloud solution provider that has officially announced commercial operations in China; however, it lacks private cloud market presence and its strategy is not clear. Forrester believes that the dominant installed base of Windows Server in China will put Microsoft in a good position to help Chinese customers with hybrid cloud adoption, as long as it can effectively expand and enable partners with customized solutions. Contenders: 99Cloud, Bingosoft, And Yonyou Are Making Substantial Progress 99Cloud. As a startup, 99Cloud develops private cloud solutions based on OpenStack. It is one of the supporting organizations of the OpenStack Foundation and has been an early and important local contributor to OpenStack in China. 99Cloud s Animbus Private Cloud Suite consists of the Animbus Cloud Controller Appliance, Animbus Cloud-In-A-Box Hyper- Converged Appliance, Animbus Private Cloud, and Animbus Virtual-IDC. 99Cloud s strengths include role-based administration and governance and competitive pricing. The other capabilities of its current offerings are relatively weak, and its strategy is less competitive than other vendors. Bingosoft. Founded in 2003, Bingosoft launched its BingoCloud platform in 2010 on Intel x86 architecture. Notable features of its private cloud solutions include integration and full API compatibility with Amazon Web Services; strengths include usage incentives and resource provisioning and management. Bingosoft began as a traditional systems integrator, and many of its private cloud users are legacy customers that have tried to develop a private cloud strategy in recent years. Bingosoft is familiar with these customers requirements and provides flexible support to integrate private cloud solutions into existing platforms. Yonyou. A traditional enterprise management software vendor, Yonyou currently offers the Unified Application Platform (UAP) cloud suite, including UAP Cloud Management Platform and UAP Soma Platform. It provides data processing and business intelligence applications based on UAP. Yonyou focuses on delivering a platform to help customers transform their existing application architecture, which is important if they are to take their mission-critical enterprise software on a private cloud journey. Supplemental Material Online Resource The online version of Figure 3 is an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings.

12 The Forrester Wave : Private Cloud Solutions In China, Q Data Sources Used In This Forrester Wave Forrester used a combination of five data sources to assess the strengths and weaknesses of each solution: Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor qualifications. Product demos. We asked vendors to conduct demonstrations of their product s functionality. We used findings from these product demos to validate details of each vendor s product capabilities. Strategy briefings. Forrester allotted each vendor 1 hour to present and discuss its cloud and product strategy. Vendors were not given strict guidelines on how to spend this time. Strategy survey. To ensure that the same core information was collected from each vendor, vendors also had to complete a 10-question strategy survey. Customer reference calls. To validate product and vendor qualifications, Forrester also conducted reference calls with three of each vendor s current customers. The Forrester Wave Methodology We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on: 1) product fit; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don t fit the scope of our evaluation. After examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria, we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies. We set default weightings to reflect our analysis of the needs of large user companies and/or other scenarios as outlined in the Forrester Wave document and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and we encourage readers to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product

13 The Forrester Wave : Private Cloud Solutions In China, Q capabilities and vendor strategies evolve. For more information on the methodology that every Forrester Wave follows, go to Integrity Policy All of Forrester s research, including Waves, is conducted according to our Integrity Policy. For more information, go to Endnotes 1 Infrastructure and operations (I&O) professionals in China face a difficult task: optimizing their firm s infrastructure to support business transformation in the age of the customer. I&O pros must realize that virtualization is different from private cloud. While Chinese organizations have reaped benefits such as improved IT infrastructure consolidation from virtualization, they can now take the next step and use private cloud to adapt technology in real time, share infrastructure resources across business units and developers, and reduce operational costs. Chinese companies planning their own private cloud first need to better understand the currently available vendor solutions and benchmarks. See the October 24, 2014, The Dynamics Of China s Private Cloud Market report. 2 This report describes the drivers shaping the market and analyzes the capabilities and go-to-market approaches of nearly 20 private cloud vendors serving Chinese enterprises. See the October 24, 2014, The Dynamics Of China s Private Cloud Market report. 3 At face value, HP s acquisition of Eucalyptus appears to be a second-guessing of HP s OpenStack commitment, but we think that this interpretation misses the mark. Instead, HP is acquiring Eucalyptus for the hybrid cloud and open source skills and commitment of its leadership and developers. The more relevant question for I&O professionals is: At what cost? See the September 16, 2014, Quick Take: HP Acquires Eucalyptus Systems report.

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